The Scots have many secrets. What is actually in a haggis and why do they like eating it? What do Scotsmen wear under their kilts and what do they keep in the sporrans? And why has their rugby team failed to beat England at Twickenham since 1983?

But perhaps the best kept secret in Scotland is, perversely, 3,500 miles away in Stamford, Connecticut. As we report this week, the performance of the US banking and markets division at Royal Bank of Scotland reads more like that of a proprietary trading firm on steroids. Last year, the business that used to be called Greenwich Capital posted pre-tax profits of $2.5bn on revenues of $3.8bn, according to an analyst presentation by the US business this month.

To put that performance in perspective, the unit accounts for just under half (46%) of the pre-tax profits in 2010 at the global banking and markets divisions, the engine room of profits and recovery at RBS. It achieves this off 31% of the division’s revenues and just 15% of its staff. It made more money than both the UK retail banking business, which made operating profits of $2.1bn last year, and the UK corporate bank, with profits of $2.3bn.

Not only is it the most profitable division at RBS, but it is one of the most profitable investment banking businesses on the street. Its 2,400 staff generate an average $1.05m a year each in pre-tax profits. That is nearly triple the profits per employee at Goldman Sachs and eight times the level at UBS Investment Bank.
This leads to a curious situation in which the UK government owns 83% of one of the most successful and profitable trading firms in the world and one of the biggest players in the US mortgage-backed securities market.

Investors (and regulators) may blanch at the fact that half of the US division’s revenues comes from credit and mortgage trading – the sort of securities that helped caused the financial crisis in the first place.
But UK taxpayers should be wishing them every success. The more money RBS makes at its shiny new headquarters in Stamford, the sooner the government will be able to sell down its stake.